Blue Sky lowers profit guidance by $7m after first round of valuations

Blue Sky lowers profit guidance by $7m after first round of valuations

Blue Sky Alternative Investments (ASX: BLA) has announced it expects its full year net profit after tax (NPAT) for 2018 to be lowered by $7 million just a week after it abandoned guidance because of the turmoil caused by a highly critical short seller's report.

The Brisbane-based company says it has completed the first phase of its previously announced independent review of asset valuations, involving 12 of 93 assets managed by Blue Sky.

As a result of the valuations, the company has made a non-cash adjustment for reductions in accrued performance fees, but says there is no "material impact" on its fee earning assets under management (FEAUM) which was also announced last week as $4 billion.

Blue Sky also withdrew earnings guidance for FY18 last week along with guidance for its FEAUM for FY18 and FY19 and the company says this was done to allow for the release of today's first phase of asset revaluations which represents 25 per cent of FEAUM.

Its FEAUM was at the core of a report released by short seller Glaucus Research six weeks ago which described Blue Sky's valuations as "wildly exaggerated" and declared its "true" share price valuation was $2.56.

On the day the Glaucus report was released, BLA shares were around the $11.50 mark and since then they have plummeted to $2.68, sending the company into damage control.

In the past few weeks there has been two board purges which included the resignations of managing director Robert Shand and chairman John Kain, while financial services industry veteran Michael Gordon stepped down yesterday as a non-executive director for health reasons.

The company has started the search for a permanent managing director to replace interim MD Kim Morison, as well as new independent directors to fill out the board. Blue Sky says it hopes to have these positions filled before the AGM in October.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Crypto staking: a new way to earn passive income
Partner Content
You may be familiar with traditional ways of earning passive income such as trading sto...
Etoro
Advertisement

Related Stories

Hospitality mogul Glenn Piper to transform Hook Island into "world class hospitality experience"

Hospitality mogul Glenn Piper to transform Hook Island into "world class hospitality experience"

Sydney hotelier Glenn Piper has snatched up his third hospital...

Super fund HESTA "unconvinced", to vote against AGL demerger

Super fund HESTA "unconvinced", to vote against AGL demerger

Superannuation fund HESTA is backing the position of Australian tec...

Airtasker completes Oneflare acquisition after ACCC withdraws concerns

Airtasker completes Oneflare acquisition after ACCC withdraws concerns

Leading online services marketplace Airtasker (ASX: ART) has comple...

Superloop set to buy tech services firm Acurus for $15m

Superloop set to buy tech services firm Acurus for $15m

After completing $140 million worth of divestments from Singapore a...